World leaders agree in Seoul G20 on joint cooperation for recovery and renewed growth

President of the Council and Commission, Herman Van Rompuy and Manuel Durao Barroso, expressed their satisfaction over the outcome of the G20 Seoul Summit held between 11 and 12 November 2010. The EU wanted this summit to make progress on joint action to boost global growth and jobs and therefore welcomes that the Seoul Action plan commits the G20 further to global action for balanced growth.

The Action Plan agreed in Seoul G20 Summit is a clear recognition of the joint responsibility held by all countries. All major economies have agreed to do their part to achieve rebalancing to tackle imbalances and will strengthen the mutual assessment process to promote external sustainability

Barroso and Van Rompuy expressed their satisfaction on the fact that the EU method to use indicators to trigger an assessment of macro-economic imbalances and their root causes was backed by the G20 leaders, and have committed to bring the experiences gathered from the process of adopting a robust mechanism to address macro-economic imbalances which is currently into place.

Currency exchange rates 'war'

During the G20 Summit, the EU has helped to build a consensus on cooperative solutions to tensions on currency issues and trade. As the EU proposed through presidents of the Council and Commission shared positions before the Summit, leaders agreed to move to more market based exchange rates and enhance exchange rate flexibility to reflect underlying economic fundamentals and refrain from competitive devaluations.  It is important now to take commitment to fight protectionism in all its forms and complete soon the end game of the Doha Development Round.

Also, the Seoul Development Consensus for Shared Growth that sets out G20 commitment to work in partnership with other developing countries to help them build the capacity to achieve and maximize their growth potential, thereby  contributing to global rebalancing.  This has placed development firmly on the agenda of the G20.

The G20 Summit also endorsed the IMF reform, something to which EU Member states have contributed decisively, and by endorsing the Basel III reform, the G20 also kept up the momentum for global financial regulatory reform, a key priority for the EU.

The Seoul Action Plan

World leaders meeting in Seoul have agreed to launch the Seoul Action Plan, shaped with unity of purpose to ensure an unwavering commitment to cooperation, outline an action-oriented plan with each member’s concrete policy commitments, and  deliver on all three objectives of strong, sustainable and balanced growth.

Specifically, they commit to actions in five policy areas with details of specific  commitments by G20 members set out in the Supporting Document:

  • Monetary and Exchange Rate Policies
  • Trade and Development Policies
  • Fiscal Policies
  • Financial Reforms
  • Structural Reforms

In addition, the G20 will enhance the Mutual Assessment Process (MAP) to promote  external sustainability, strengthening multilateral cooperation to promote external sustainability and pursuing the full range of policies conducive to reducing excessive  imbalances and maintaining current account imbalances at sustainable levels.